ABANDONED HOUSING PROJECTS: SOCIO-ECONOMIC IMPACT OF 
CONSTRUCTION READINESS

Nurul Aishah Abd Rahman, Rahimi A. Rahman, Ahmad Rizal Alias

Overview of abandoned projects

The rising issue of abandoned housing projects significantly impacts the surrounding neighborhoods and economic growth. That is to say, the problem regarding cost transfer between the private and public sectors, include the nature of the environment, such as visual effects, erosion, and pollution.

As of January 2023, it has been highlighted and updated in the Ministry of Local Government Development(KPKT) website that there are up to 115 projects involving a Gross Development Value (GDV) of 7.67 billion with the status of abandoned projects.

These projects were abandoned for the reasons of negatively impacting the construction industry and economic growth. Moreover, the vast amount of money and resources spent and wasted in the form of capital materials and human labor causes backlash to the clients involved in the project investment. Furthermore, abandoned projects increase the possibility of illegal activities occurring that subsequently affect the safety and well-being of a community.

As the best solution to monitor the abandoned housing project issues, KPKT listed the number of abandoned projects under the planning categories of restoration, being revived, and successfully being revived. 

Figure 1 shows the latest project updates until 2022. Despite the prevalence of abandoned projects, efforts are continuously being made to update and resume them. Nonetheless, the decision-making process between developers and buyers has taken longer than anticipated. This delay has increased costs for restoring these projects due to the quick decay of structures, which can impact the surrounding aesthetic. To address this issue, expediting the resumption of construction work on abandoned projects that have been left unattended for an extended period is crucial.

Most resumed abandoned housing projects were successful, but some ended up needing to be more satisfactorily, fulfilling, or inferior. Additionally, a limited number of companies are willing to invest in the resumption of these construction projects, which can cause delays in their completion. Construction work faces delays due to inadequate preparation before the construction phase. Proper upfront planning, including cost and schedule factors, is necessary to avoid these delays. Rushing or mobilizing construction can lead to incomplete engineering documentation, unmitigated assumptions, late design deliverables, and unrealistic schedules. To prevent issues and ensure things go smoothly, engaging in strategic planning and preparing for construction ahead of time are essential.

Resuming abandoned housing projects

On December 30, 2022, the Special Task Force (STF) of Abandoned Housing Project was established by KPKT with the responsibility to find a more holistic, focused, strategic approach and a positive impact in solving the issue of abandoned projects. 

The Terms of Reference (TOR) have been refined by strengthening four (4) elements: Track, Resolve, Preventive, and Forward Modeling. Ever since STF was formulated under KPKT, there have been five (5) abandoned housing projects successfully resolved, namely, 

(1) the Dolomite Park Avenue in Gombak, Selangor

(2) Taman Petaling Utama 

(3) Casa Melati, Selangor 

(4) Pantai Avenue Bukit Kerinchi, W.P. Kuala Lumpur

(5) Lot 5918-5927, Mukim Bukit Besar, Kuala Terengganu.
 
The restoration phase can be resumed for projects that are less than ten (10) years old after being abandoned. 

The government is committed to resolving problematic housing projects and abandoned commercial projects effectively and efficiently, regardless of whether they belong to private or government agencies.

However, only some projects are worth the revival, and various factors must be taken into consideration, such as the number of sold and existing purchases in the project and whether the houses will have a buyer upon completion.

As per the KPKT requirement, a case study will be conducted after a project is declared abandoned to assess the feasibility of reviving it within six (6) months. A white knight or rescue contractor must be found within three (3) months to resume the construction of the abandoned housing projects. In an early stage of construction continuation before execution works, preparing complete information regarding the abandoned project helps industry practitioners decide whether to proceed with the restoration or not.

Construction Readiness for Abandoned Projects

Construction readiness is the series of activities or procedures that should be completed before construction starts to sustain the operation productively. 

Commencing the construction projects before the said time has harmful effects on all project stakeholders, such as interruption or delayed progress after being started, thus affecting the total cost needed. It also negatively impacts the local communities by reducing property values and increasing crime rates.

Plus, improper management of readiness activities for construction can prolong blight and cause harm to the surrounding area. Additionally, safety measures should be taken during reconstruction planning to avoid accidents and injuries to workers and the public. An early start, also known as a premature start, can be a reason for wasteful operations, reworking, and material deficiencies. The contractor must identify and document leading indicators, drivers, and potential outcomes from a premature start. Therefore, the first step to a successful reconstruction is determining whether the construction preparation or readiness complies with the requirements to begin the next step, or, in simple terms, whether the construction is well qualified to start.

Resuming abandoned housing projects is challenging because project developers are prohibited from imposing extra charges or additional costs on buyers, despite having to deal with the increase in material prices and labor costs. Fluctuations in material prices urged companies to cover the cost by selling unsold units at a higher cost than current market rates.

Construction Readiness Assessment

The Construction Readiness Assessment is a methodology for monitoring project health, preventing premature construction starts, and avoiding out-of-sequence work. 

The concept of construction readiness, as shown in Figure 2, is that the abandoned housing project requires assessing the readiness of construction depending on completing the required checklist before proceeding with the execution works. The decision made on construction readiness depends on documentation factors and physical measurements. 

In general, construction readiness has a significant impact on the socio-economic system. A construction project that is well-prepared and ready to begin can create numerous economic benefits, including job opportunities, increased tax revenues, and an increase in economic activities in the surrounding community.

Conducting a construction readiness assessment for an abandoned housing project requires a unique approach and significant resources compared to a standard construction project.

It is essential because abandoned housing projects may have been left in a state of disrepair or may have significant issues that must be addressed before construction begins. When assessing the construction readiness of abandoned housing projects, some elements need to be considered, as shown in Figure 3, including site assessment, structural assessment, health and safety assessment, building code compliance, funding, stakeholder engagement, workforce and skills assessment, project timeline, and quality assurance.

The requirement for site assessment helps gather accurate and complete site information to evaluate the site's potential threat to human health and any environmental hazards. 

The process of assessing the site started with data collection, analysis of the collected data, and incorporating the information into a preliminary concept and design. 

Additionally, conducting a structural assessment of existing buildings could assist industry practitioners in determining the structural condition and integrity of foundation, framing, and construction systems in terms of the capabilities of buildings to withstand various environmental and structural loads. After abandonment, the existing structures' specifications differ from the standard or current building codes. 

Thus, an assessment is made to evaluate a structure's current and future use and comply with all current building codes to obtain necessary permits and approvals, including procuring materials, equipment, and personnel.

Abandoned houses quickly succumb to the environment and can deteriorate quickly. Moreover, unstable structural elements are a big concern when resuming abandoned housing projects due to the potential hazards that may affect workers at the workplace or occupants of the buildings. Therefore, conducting ahealth and safety assessment by thoroughly inspecting the work environment and equipment helps prepare a proper safety system to prevent injury.

Resuming a project requires sufficient funding considering all costs associated with it, including site preparation, remediation, and construction costs. Finding potential funding sources or investors is challenging as there is less attraction to securing funding. Engagement with community groups, government agencies, and other stakeholders is essential to ensuring their concerns and priorities are addressed in the project. It will help in minimizing negative impacts on the social economy to ensure that the groundwork and management of the project are finalized thoroughly. The workforce involved in the project must assess their skills to ensure they can complete the project within the stipulated timeline. Developing a timeline for resuming the abandoned housing project must consider site-specific issues, remediation, and construction work. Inefficient planning can result in cost overruns that strain project budgets and impact the social economy by diverting resources from other vital projects. 

The last element to be considered when assessing construction readiness is quality assurance, which involves implementing quality management processes and procedures to ensure that the project meets the required quality standards. With proper management, the project can continue these efforts, which can have significant social and economic impacts.

Challenges in implementing construction readiness assessment

Various factors can make assessing the construction readiness of abandoned housing projects challenging. One of the common challenges is defining what will be assessed and the criteria used to evaluate readiness. It is essential to clearly understand the project scope, the expected outcomes, and the relevant standards or regulations that must be followed.

Additionally, input from various stakeholders, including owners, contractors, designers, engineers, and other project team members, requires identifying the right people with the necessary expertise. Moreover, the assessment process should be consistent and objective to ensure that all aspects of the project are evaluated fairly. Different stakeholders have different perspectives and need clear guidelines or standards for the assessment. 

Most abandoned projects need more detailed information or outdated documentation, including missing plans, incomplete design drawings, and obsolete permits. Thus, collecting, managing, and analyzing data and documentation, including tracking progress, identifying issues, and communicating findings and recommendations to stakeholders related to the project, can be a significant challenge. Implementing a construction readiness assessment requires time, money, and other resources. Ensuring adequate resources to support the assessment can take time, mainly if the project is large or complex. Implementing a construction readiness assessment requires careful planning, coordination, and stakeholder communication. Identifying potential challenges early in the process and developing strategies to address them proactively are essential.

Benefits of applying construction readiness assessment tools

Applying construction readiness assessment tools before resuming abandoned housing projects can improve project outcomes, reduce the risk of future abandonment, enhance stakeholder engagement, and reduce project costs. By identifying potential challenges and risks early in the process, stakeholders can develop strategies to address them proactively, improving the chances of project success. The readiness assessment can help identify the causes of the project abandonment, enabling stakeholders to address the underlying issues and develop strategies to prevent similar issues. Thus, the assessment can positively impact the social economy by providing more cost-effective materials, improving project design, and refiningconstruction methods and material selection to produce a better-quality final product. Therefore, the assessment gives an advantage in mitigating the potential environmental impacts, reducing the costs associated with the resumption of construction, and further supporting the social economy.

Moreover, stakeholders' input and feedback will lead to a more collaborative and inclusive project by engaging stakeholders in the construction readiness assessment process. By adequately engaging with the local stakeholders, the communities can unlock the full potential of abandoned buildings and create new opportunities for growth and prosperity. 

Conclusion

Resuming all abandoned housing projects at once can be challenging because some projects might have started prematurely or inadequately prepared, resulting in delays after they have started to resume. These issues can lead to incomplete projects and circumstances beyond control. 

It is crucial to assess construction readiness to reduce the possibility of premature starts by considering the elements of site assessment, structural assessment, health and safety assessment, building code compliance, funding, stakeholder engagement, workforce and skills assessment, project timeline, and quality assurance. 

These elements are looked at comprehensively from the aspects of well-prepared documentation and completed physical measurements before resuming abandoned housing projects. Nevertheless, implementing the assessment is quite challenging due to the demanding criteria, unclear scope, outdated documentation, miscommunication among various stakeholders, missing documents and plans, and inadequate resources to ensure the construction site is well-prepared after it has started.

Therefore, stakeholders can develop strategies for proactively addressing underlying issues related to thecauses of project abandonment to prevent similar issues in the future. The assessment improves the chances of project success by identifying potential challenges and risks early in the process. Overall, abandoned building construction readiness assessment tools can have a range of positive impacts on the 
social economy and the environment.

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